The politics of the downturn

It's the economy again, stupid

Voters punish the government for a loss of economic grip

NO POLITICIAN who values his career will ever be caught hoping for a recession. Until recently, however, a theory doing the rounds had it that an economic downturn could even benefit the government. Voters feeling vulnerable would opt for stability, and the long-cultivated image of Gordon Brown, the prime minister, as steady and serious would serve as an asset. There was an obvious precedent too: a recession did not stop John Major, another prime minister who made a virtue out of predictability, leading the Conservatives to a fourth term in power in 1992.

But after a series of polls showing support for Labour plummeting, and as bad news about the economy multiplies, few continue to entertain that notion. The Tories, recently scratching their heads as to why they weren't doing better, are scoring double-digit poll leads. A Populus survey released on April 8th shows that 20% more people think that the economy will do badly over the next year than that it will do well: the exact opposite of the situation at Mr Brown's last budget in March 2007 (see chart). During the past decade of steady growth and low inflation, the economy slid down voters' list of concerns. But economic setbacks have seen its salience rise again—which helps to explain why Mr Brown's personal ratings are at their lowest since he became prime minister.

A souring housing market will further perturb voters who have grown accustomed to soaring property values over the past decade. Mr Brown, who in opposition reaped the political benefit of the last property slump, knows how much the issue resonates with British voters. He immediately took to the airwaves after this week's dire house-price figures and promised to help homebuyers.

But Mr Brown's government has already made mistakes in its handling of the economy. Last month's budget failed to capture the mood. Voters who were expecting an acknowledgement that there were tough times ahead instead got overly optimistic growth forecasts. The Treasury's central forecasts that the economy will expand by 2.0% this year and by 2.5% in 2009 are much sunnier than the ones made this week by the IMF, which is predicting growth of just 1.6% each year.

It is difficult to see what Mr Brown can now do to reverse the situation. Evoking memories of the recession of the early 1990s, when millions of households suffered negative equity, was once enough to keep the opposition at bay. But that trope is less effective now. Neither can he count on the Tories over-egging their own response: they appear to have learnt their lesson after their widely criticised call for Alistair Darling, the chancellor of the exchequer, to resign over nationalising Northern Rock. Their reaction to the housing news was sensibly restrained. David Cameron, the Tory leader, is a more credible opponent than Neil Kinnock, the Labour leader defeated by Mr Major in 1992.

Mr Brown's position is not yet irretrievable. For one thing, the Tories have not built an unassailable lead on economic competence (one recent poll has the two parties only level-pegging). Voters are also still as likely to blame banks and the international financial system for the credit crunch as the government. The local and London mayoral elections in May will offer important clues to the mood.